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Palantir’s AI Surge Faces Valuation Test as Shares Slip to Key Levels

Extreme valuation now collides with strong AIP adoption, leaving the stock to prove support holds.

Overview

  • Shares fell below the 50-day moving average and are hovering near the 100-day line, marking the first major technical break of this AI rally, The Street reports.
  • Q3 revenue reached about $1.18 billion, up 63% year over year, with U.S. commercial sales up 121% and an adjusted operating margin of 51% on $600.5 million of operating income.
  • Hiring data show a shift from software development to operational deployment across Palantir and its ecosystem, with operations roles up roughly 13% and R&D falling to 12.2% of revenue from about 18%.
  • Analyst sentiment remains cautious despite raised targets post-earnings; Freedom Capital lifted its target to $170 but kept a Sell rating, citing valuation and potential growth headwinds.
  • Valuation metrics remain stretched, including a trailing P/E near 444, price-to-sales around 112, and a forward P/E near 237, with a market cap near $394 billion that would require roughly 145% upside to reach $1 trillion.